IBM to gobble Red Hat for $34bn - yes, the enterprise Linux biz

IBM to gobble Red Hat for $34bn - yes, the enterprise Linux biz

However, Red Hat has seen increasing adoption of its container management software, which works with Docker and Kubernetes to help companies manage hybrid applications deployed across their own data centers and public clouds. The statement goes on to predict that the deal will accelerate IBM's revenue growth, margin and free cash flow within one year of closing.

IBM hopes with the acquisition it will be one of, if not the leading "Hybrid Cloud" providers in the market. It will just have to worry about potentially being dissolved into IBM's businesses or its open source culture and principles being diluted in the process.

"The biggest part of the news", Whitehurst said, "is that the company that is bringing us into their fold is committed to keeping the things that have made us Red Hat and that have made us successful over the years, always thinking about the customer and supporting the community as the innovation platform for our success". This is the next chapter of the cloud.

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At the same time, sales last quarter overall missed analysts' expectations and the forecast for the current quarter also fell short, fueling concerns Red Hat may be losing deals to rivals and growth may be slowing. It intends to maintain Red Hat's headquarters, facilities, brands and practices. "IBM will become the world's". He said the acquisition would give Red Hat greater scale and resources to increase the impact of open source software. Morgan Stanley and Guggenheim Partners were financial advisers to Red Hat, while Skadden Arps Slate Meagher & Flom provided legal advice. It has more or less survived lately on the server business but the rise of the cloud and cloud providers has seen its name overshadowed and nearly forgotten. Open-source software such as the Linux operating system, the web browser Firefox and big-data analysis software such as Apache Hadoop has gradually become the bedrock for many applications, even in large enterprises.

"Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs", Rometty said. Will it be a positive for the open source and Linux communities? The two companies will remain committed to "the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network" open-source licenses and initiatives, according to the companies' joint statement. Or CentOS which takes Red Hat and debrands it. It's well-known for trying to integrate acquisitions into its huge organization, a process known internally as "blue-washing". "It remains to be seen if IBM can play the same role, which would be significant upside for IBM". The two companies said the deal, approved by their respective boards, is subject to Red Hat shareholder and regulatory approval and should be completed in the latter half of 2019. It's probably both a tacit admission that the company can grow faster with younger, nimbler innovators than without them so it seems like there is business sense to the deal.

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